We have seen strong growth. More leagues, more events and more places to play are helping. As for the competitive side, keeping membership free is smart in my opinion. Some people would not bother to join if there was an entry fee, but once they see their name on the list it can help motivate people to play in more events.
I really don't mind a small portion of my state entry fee going to the national event. If it helps a bit to draw more people to the event, then it sounds like a good thing to me!